Amobee Buys Adconion For $235M And Kontera For $150M In Consolidation Play

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Another day, and another two big acquisitions in the digital advertising industry. Amobee, a mobile ad company acquired by Singapore’s main carrier SingTel two years ago for $321 million, is buying up not one but two other companies to build out its position in the wider digital ads space: It’s gobbling up Adconion and Kontera, for $235 million and $150 million, respectively.

Amobee notes that the consideration payable for Adconion Direct North America and Adconion Australia (the two divisions of Adconion) is approximately $209 million, excluding debt. Both Adconion and Kontera will become a part of SingTel.

Adconion, which has been around since 2005, had raised some $114 million from investors like Index Ventures and Wellington. Among the company’s twists and turns over the years, in 2009 it picked up the failed video network Joost — originally founded by the creators of Skype with lots of high hopes – and in 2012 folded it into smartclip, Adconion’s existing online video ads business. The company says it has some 2,000 clients on its platform.

Kontera, meanwhile, is a another long-in-the-tooth advertising startup that was something of a pioneer in ad tech and analytics. The company, based in the U.S. but with its roots in Israel, had raised around $36 million from investors that included Sequoia Capital and Carmel Ventures.

The move is a big consolidation play from Amobee, bringing in both a bigger client footprint and more ad tech. SingTel has some 500 million subscribers in Southeast Asia and beyond over mobile, broadband and fixed-line connections, and so this is, in part, about the company picking up technology to target them with more and different kinds of ads.

“The SingTel Group has significant scale and customer relationships with over 500 million mobile customers, as well as intelligent networks, billing capabilities and extensive touch points,” said Allen Lew, CEO, Group Digital L!fe and Chairman of Amobee, in a statement. “Together with Amobee’s advanced digital marketing technology and solutions, we will create relevant and innovative marketing campaigns across multiple channels for brands and advertisers. These acquisitions will further differentiate Amobee and help solidify its position in the digital advertising market.”

But at the same time, this also points to a larger trend for consolidation in advertising with the economics of the business, with its thinner margins, favouring bigger players.

“The digital advertising business is about scale and capitalizing on the market opportunities with technology as a core differentiator,” said Mark Strecker, CEO of Amobee. “With these two acquisitions announced today, we have extended our product offerings, increased our sales footprint and reinforced Amobee’s leadership position in the fast growing digital advertising market.”

The news comes at the same time that there may be other consolidation moves afoot in the digital ads space. As we reported earlier today, we have heard Opera is buying AdColony for a price in the hundreds of millions of dollars. It looks like the WSJ had caught wind of the Kontera acquisition before the news was made official today, although the Adconion buy was kept under wraps.

These are not the first acquisitions from Amobee under SingTel. Last year, Amobee acquired GradientX to add real-time bidding technology to its platform. In 2012, it acquired AdJitsu from Cooliris to bring in 3D technology.

Image: Flickr